Effective Analysis of the Central Adjustment System in Resolving the Pension Payment Crisis
- SHI Chenxi & ZENG Yi
- SHI Chenxi (Chongqing Technology and Business University, 400067)ZENG Yi (Zhongnan University of Economics and Law, 430073)
The central adjustment fund is the first step to the national overall management of basic pension, which can alleviate the pension payment crisis in some provinces. The authors establishes an actuarial model, measured the financial status of the central adjustment fund, and simulated the impact of the central adjustment system on the sustainability and subsidies of the basic pension insurance funds in each province (municipality).The results show that: (1) Before the central adjustment fund system, the basic pension insurance fund in Central China was hit by a cumulative deficit earlier than that in East and West China. (2) After the implementation of the central adjustment system, the basic pension insurance fund in 19 provinces (municipalities) experienced a decline in the scale of the first accumulated deficit, and the time of first accumulated deficit in Sichuan and Liaoning was postponed. (3) Increasing the handover ratio of the central adjustment system will enhance the adjustment effect. (4) The adjustment effect of the central adjustment system is positively affected by the effect of the delayed retirement policy. (5) Under the current handover and appropriation method of central adjustment system, a higher subscription rate means more fund income for areas with a higher proportion of retirees. The central adjustment system is conducive to the sustainability of the pension insurance fund in West China and other areas with underdeveloped market economy, but the actual effect depends on the retirement age, the subscription rate, the wage level and so on. While tightening grip on pension fund adjustment, the government should factor into the current operation status of pension funds to ensure both fairness and efficiency.
- Pension,Central Adjustment System, Fiscal Burden, Sustainability